Chapter 11 announced - Part 14 - Plan Effective

[Eagle1993 2161]

15 minutes ago, SNEScouter said:

Respectfully, I must strongly disagree with your assessment of Purdue's impact on the BSA plan.

There is a HUGE difference between BSA and Purdue, which is that BSA's plan has already gone into effect.  Purdue's plan is now stayed and cannot go into effect, if at all, until after SCOTUS rules on the validity of non-consensual third-party releases.  (I agree June '24 is the likely timeframe for that decision.)

We are in unchartered territory here, and so a lot of permutations are possible.  BSA Plan Supporters are not happy to see SCOTUS reviewing nonconsensual third-party releases. 

That said, IMHO, the most likely outcome is that the Third Circuit receives all briefs and decides that the appeals of Lujan, D&V, Certain Insurers, etc. are equitably moot.  Briefing has already begun and so it seems like the Third Circuit ruling could come before a SCOTUS ruling in June '24, but who knows.  Therefore, even if there was reversible error in the BSA Plan approvals, the Third Circuit will likely find that it is powerless to reverse those errors because the plan has already gone into effect.  BSA is now a reorganized debtor and lots of assets have been paid to the Settlement Trustee in exchange for the third-party releases (largely by insurers and Local Councils).  The Settlement Trustee has already started incurring substantial operating expenses against those assets, and might very well start paying at least the expedited $3500 claims before either the Third Circuit or SCOTUS issues any rulings.  There are a lot of other aspects of the plan which also depended (at least indirectly) upon the third-party releases.  It would be virtually impossible for an appeals court to unscramble that egg. 

So even if SCOTUS ultimately finds in Purdue that nonconsensual third-party releases are not permissible, it does not follow that BSA's plan will be imperiled or affected by that ruling.  Today, and certainly by June '24, it will be a practical impossibility to reverse the implementation of BSA's plan of reorganization.  When Plan Supporters file their Third Circuit briefs in the relative near future, you can expect to see a lot of arguments like the above under the heading of equitable mootness.

By the way, equitable mootness is virtually certain NOT to be in issue in Purdue.  Because of the SCOTUS decision to stay the Purdue plan pending SCOTUS's ruling, the Purdue plan will not go into effect before SCOTUS rules, and equitable mootness will not be at issue.  So the Third Circuit is going to apply existing law on equitable mootness, which as I understand tend to favor overruling the various appeals.

Hope you are correct.

Questions... 

1) Most of the $ comes from insurance companies and little has been paid. What percentage of the billions committed has been paid? I wonder how it will be moot if the powder is still dry.  

2) It is clear the Supreme Court is now questioning non consensual non debtor releases.  This is a change and one would think appellants will highlight this change in their appeals.  Could that cause insurance companies to slow role the process? 

The big question is if non debtor releases are unconstitutional, doesn't that open up COs and Local Councils to lawsuits even if the plan is approved?  

[Eagle94-A1 2687]

38 minutes ago, Eagle1993 said:

The big question is if non debtor releases are unconstitutional, doesn't that open up COs and Local Councils to lawsuits even if the plan is approved?  

My question is specific to COs: Is National and/or councils responsible for the CO's liability since they were promised protection under BSA's policies? When this type of liability issue came up back in the day, I was told by my DFS to tell the IH that they were protected under BSA's insurance.  Going back even further, while I was in college, the outdoor club was looking at joining some national organization for insurance, and they were told the same thing by the DE.

[MYCVAStory 687]

7 hours ago, SNEScouter said:

There is a HUGE difference between BSA and Purdue, which is that BSA's plan has already gone into effect.  Purdue's plan is now stayed and cannot go into effect, if at all, until after SCOTUS rules on the validity of non-consensual third-party releases. 

Not as much as you think.  While the BSA plan has gone effective it is still under appeal.  So, it is reversible.  One of the reasons the Trust is moving quickly is because sometimes a Court of Appeals will effectively say "The egg has been scrambled so any ruling we make shouldn't undo what has been done.  In this case, the Court of Appeals is expected to NOT rule since it knows that the Supreme Court is addressing a key portion of the BSA plan, the third-party releases.

7 hours ago, SNEScouter said:

That said, IMHO, the most likely outcome is that the Third Circuit receives all briefs and decides that the appeals of Lujan, D&V, Certain Insurers, etc. are equitably moot.  Briefing has already begun and so it seems like the Third Circuit ruling could come before a SCOTUS ruling in June '24, but who knows.  Therefore, even if there was reversible error in the BSA Plan approvals, the Third Circuit will likely find that it is powerless to reverse those errors because the plan has already gone into effect.  BSA is now a reorganized debtor and lots of assets have been paid to the Settlement Trustee in exchange for the third-party releases (largely by insurers and Local Councils).  The Settlement Trustee has already started incurring substantial operating expenses against those assets, and might very well start paying at least the expedited $3500 claims before either the Third Circuit or SCOTUS issues any rulings.  There are a lot of other aspects of the plan which also depended (at least indirectly) upon the third-party releases.  It would be virtually impossible for an appeals court to unscramble that egg. 

I agree but remember that the settling insurers are NOT required to make a large portion of their payments until ALL appeals have been settled.  So, the egg may not be as scrambled as it could be.

The bottom line I believe is that this is still up in the air a bit more than most recognize.  IF the appeals are denied tomorrow then ANY Supreme Court rulings later on won't matter.  As well, should this be denied on appeals it CAN be paused if the objectors can get the Supreme Court to accept a writ doing so.  Given its move to do so with Purdue, it very well might grant that as Purdue unfolds.  Again....things are still in flux.

 

[MYCVAStory 687]

The Dumas and Vaughan attorneys, representing 69 clients, have filed for a Stay with the third district court of appeals.  Unsurprisingly, Purdue and its issues, most notably third-party releases, was cited as cause.  The requested Stay would of course pause things until the Supreme Court rules by next June.  What a pause means though is not known right now and would be litigated.  It could mean a pause on awards or a pause on all Trust activity, or somewhere in-between.  Briefs objecting to the Stay motion will be due in October from Plan Supporters.  One interesting issue is the requirement to provide a Bond while you get your stay.  The Bond is also litigated and serves to protect the Trust against any losses during a Stay.  If the court rules for a bond amount that D&V can't secure the Stay goes nowhere.  Regardless of all of this, I haven't spoken to an attorney who practices in bankruptcy who expects the Court of Appeals to rule before the Supreme Court does.  So....the post-Purdue pause expected Stay motion has been filed.  This will heat up in late October or sooner if all briefs are filed beforehand, and Survivors will again wait to see whether it is granted, and if so, what gets paused.  If you like the plan, stay worried.  If you don't like the plan, know that there's an effort to have the Supreme Court's Purdue decision impact it.

[Eagle1993 2161]

11 hours ago, MYCVAStory said:

If the court rules for a bond amount that D&V can't secure the Stay goes nowhere. 

I wonder if certain insurers would be willing to post that bond on their behalf.

If they can get the stay, I think there is a decent chance the plan is thrown out in June.  It now may be worth that bond payment from them...

[Eagle1970 210]

On 8/14/2023 at 8:14 PM, MYCVAStory said:

I agree but remember that the settling insurers are NOT required to make a large portion of their payments until ALL appeals have been settled.  So, the egg may not be as scrambled as it could be.

 

More important than ever, the longer the insurers can hold on to the money, the less it is worth.  The wife an I had breakfast at Denny's the other day for $48.70.  (So much for the $1.99 Grand Slam!).  Simply delaying the inevitable is a win for them (and a loss for survivors).
 

[Eagle1970 210]

Just received the email:

 

Letter from the Settlement Trustee (Aug. 17, 2023):

Processing Portal Opened for All Claims

My commitment as Trustee is to provide compensation and a measure of justice to the Survivors of childhood sexual abuse that occurred during their time in the Boy Scouts of America (“BSA”). Every member of the Scouting Settlement Trust (“Trust”) team joins me in sharing these goals.

 

To that end, I am pleased to open the claims processing portal to all Claimants, starting today.

[SNEScouter 60]

On 8/14/2023 at 2:40 PM, Eagle1993 said:

1) Most of the $ comes from insurance companies and little has been paid. What percentage of the billions committed has been paid? I wonder how it will be moot if the powder is still dry.  

This was not easy to find but here it goes...

1) Hartford is paying a total of $787 million of which $137 million was payable on the Effective Date.  See Docket 8816, page 29.

2) Century is paying a total of $800 million of which $50 million was payable on the Effective Date.  See Docket 8907, page 6.

3) Zurich is paying $52.5 million.  As best as I can tell, none of it is payable until appeals are resolved.  See Docket 8907, page 158.

4) Clarendon is paying a total of $16.5 million of which $2.871 million was payable on the Effective Date.  See Docket 8907, page 227.

The above is what the insurers were contractually obligated to pay on the Effective Date with the rest coming due when all appeals are resolved.  It seems they are permitted to pay more earlier at their option.

[SNEScouter 60]

13 hours ago, Eagle1970 said:

More important than ever, the longer the insurers can hold on to the money, the less it is worth.  The wife an I had breakfast at Denny's the other day for $48.70.  (So much for the $1.99 Grand Slam!).  Simply delaying the inevitable is a win for them (and a loss for survivors).

The settling insurers had to pay the money into escrow, where the funds will be invested until paid over to the Settlement Trust.  If the market does well, the survivors will benefit from it.

[Eagle1993 2161]

16 minutes ago, SNEScouter said:

This was not easy to find but here it goes...

1) Hartford is paying a total of $787 million of which $137 million was payable on the Effective Date.  See Docket 8816, page 29.

2) Century is paying a total of $800 million of which $50 million was payable on the Effective Date.  See Docket 8907, page 6.

3) Zurich is paying $52.5 million.  As best as I can tell, none of it is payable until appeals are resolved.  See Docket 8907, page 158.

4) Clarendon is paying a total of $16.5 million of which $2.871 million was payable on the Effective Date.  See Docket 8907, page 227.

The above is what the insurers were contractually obligated to pay on the Effective Date with the rest coming due when all appeals are resolved.  It seems they are permitted to pay more earlier at their option.

Thanks!  I remember it was listed but couldn't find it in the various plan documents.  I wonder if the trust has to report monthly updates regarding their accounts/expenses.  I haven't seen it in the docket.

[Eagle1970 210]

10 hours ago, SNEScouter said:

The settling insurers had to pay the money into escrow, where the funds will be invested until paid over to the Settlement Trust.  If the market does well, the survivors will benefit from it.

I was not aware of that.  Thanks for the info.  The same still applies to non-settling entities.

[MYCVAStory 687]

Re the questionnaire being available...

1.  FOUR months to submit, and not six.  Attorneys with thousands of clients scrambling.

2.  Check this interview from today's TODAY Show: https://www.today.com/video/former-boy-scouts-can-now-file-claims-in-sex-abuse-settlement-191094341570

If I were the Trustee I would NOT be telling Survivors that they will receive EXACTLY what was spelled out in the claims matrix.  Regardless of ONE expert's opinion on this, and that opinion changed significantly during this process, my response would have been" "I am committed to seeing that Survivors get every penny available but we won't be able to best determine that until we understand fully the abuse and the number of Survivors that complete our questionnaire."  If this moves forward AND doesn't turn out well financially she'd better prepare her answer to the question "You said that Survivors might get up to $2.7 million.  Now it appears that none received that much.  Why not and why did you make that statement?"

Bottom line, this is all about scrambling the egg but the race is on to complete the questionnaires and move things along at the same time that the end result is still very much up in the air.

[Eagle1970 210]

Did I read somewhere that this was First In First Out, as far as questionnaire submission?  I represent myself so I can move it along, if that is the case.

[SNEScouter 60]

On 8/16/2023 at 9:07 PM, MYCVAStory said:

The Dumas and Vaughan attorneys, representing 69 clients, have filed for a Stay with the third district court of appeals. 

The Third Circuit Court of Appeals has denied the stay motions "without prejudice to filing renewed stay motions in the District Court."  They need to take it up with Judge Andrews in the Delaware District Court before the Third Circuit Court of Appeals will consider it.

[MYCVAStory 687]

1 hour ago, Eagle1970 said:

Did I read somewhere that this was First In First Out, as far as questionnaire submission?  I represent myself so I can move it along, if that is the case.

Yes, but that doesn't mean claimants get any more money, or that it "should" run out.  The Trust will make awards based on projections for all claimants.  I'm probably not saying that correctly.  Bottom line is that there isn't a financial advantage to being first in line.  Also, I've heard some attorneys will slow-roll in case clients' abusers get reported by someone else first.  That might bolster a claim.  Fingers crossed the Trust is going to address questions like this.